Utter v. Chapman

By the Court, Crockett, J.:

The only question on this appeal relates to the measure of damages for the breach of a contract between the plaintiffs and defendant, whereby the latter agreed to furnish the former five hundred tons of grain, to be transported as freight, at the rate of two dollars per ton, by way of the river, from Paradise City to Stockton. The plaintiffs were the owners of a steamboat and barge, whereon the grain was intended to be shipped; and they applied to the defendant for the grain in due time, and offered to perform the contract on their part; but the defendant refused to deliver *282 any of the grain, except eight tons. The Court finds that after their failure to obtain the grain, the plaintiffs employed their boat and barge in navigating the San Joaquin River and its tributaries during the time which would have been required to perform the contract with the defendant, and during that interval used all reasonable effort to procure employment for said boat and barge, but succeeded in obtaining freights to the value of only three hundred and forty-one dollars and eighty-four cents; and that, whilst so endeavoring to obtain freights, the expenses of the boat and barge were the same that they would have been in performing the contract with the defendant, if it had been performed.

When this case was here on a former appeal we endeavored to lay down a proper rule for the measure of damages on the new trial, which was ordered. On the second trial the Court below decided the measure of damages to be the contract price, to wit: one thousand dollars, less the earnings of the boat and barge, during the time which would have been required to perform the contract. Deducting the three hundred and forty-one dollars and eighty-four cents, earned by the boat and barge, from the one thousand dollars, it entered a judgment for the plaintiff for the remainder.

On the former appeal we held that the proper measure of damages was the difference between the contract price and what it would have cost the plaintiffs to perform the contract, less what the boat and barge actually earned, or might have earned, with reasonable diligence, during the time which would have been consumed in performing the contract. The Court finds that it would have required three weeks time to perform the contract, and that during that period the expenses of the boat and barge would have been forty dollars per day when running, and twenty-eight dollars per day when lying at the dock taking in or discharging *283 cargo. It is clear, therefore, if the contract had heen performed that the plaintiffs’ profits would have heen the difference between the contract price of one thousand dollars and the expense of forty dollars per day when running, and twenty-eight dollars per day when lying at the dock. The findings further show if the contract had been performed the boat and barge, while so employed, would have been running about three fourths of the time, and would have been lying at the dock, whilst taking in and discharging cargo, about one fourth of the time. Calculating the cost of performing the contract at this rate, it would have amounted to seven hundred and seventy-seven dollars, leaving as profit, on a full performance of the contract, the sum of two hundred and twenty-three dollars. But, as we held on the former appeal, there must be deducted from this sum whatever amount the boat and barge actually earned, or might, with reasonable diligence, have earned, during the time required to perform the contract. It appears from the findings that they, in fact, earned three hundred and forty-one dollars and eighty-four cents; but in earning this sum, and in a reasonable effort to earn other sums (which efforts, as we have heretofore decided, it was their duty to make), the plaintiffs have incurred an expense of seven hundred and seventy-seven dollars. Deducting the sum earned from the expenses, and it leaves an excess of expenses over earnings of four hundred and thirty-five dollars and sixteen cents. The only serious question in the case is. whether the defendant should be charged with this excess of expenses over the earnings of the boat and barge. If this question be answered in the affirmative, the judgment ought to have been for this sum, and for two hundred and twenty-three dollars, the profit which the plaintiffs would have made by performing the contract, making in the aggregate the sum of six hundred and fifty-eight dollars and sixteen cents. On the other hand, if the defendant is not liable *284 for these expenses, the judgment should have been for the profits only (two hundred and twenty-three dollars.) The correct interpretation of our decision on the former appeal is that the plaintiffs are entitled to recover only the actual loss which they suffered from the breach of the contract; and if it appeared that during the space of time which would have been requisite for the performance of the contract by them they had, or by the use of reasonable diligence might have realized a profit from the use of the boat and barge equal to or exceeding the profit which they would have made by performing the contract, in that event they would have suffered no loss, and would have been entitled to nominal damages only. The burden of proof was on the defendant to show that the boat and barge had, or might have realized a profit, and if the net earnings did not equal or exceed the profit which the plaintiffs would have made by performing the contract, then such net earnings would reduce, pro tanto, the amount of plaintiffs’ loss.

But we did not decide, nor intend to intimate, that the defendant stood in the relation of a guarantor, incurring the hazard of whatever loss the plaintiffs might sustain by reason of a fruitless effort to obtain a profitable employment for the boat and barge. It was incumbent on the defendant to show, if he could, that a profit had been or might have been realized by the boat and barge; and, failing in this, the only result would have been that the plaintiffs would have recovered the difference between the contract price and the cost of performing the contract. But if a person should charter a ship for a number 'of months, or for a long voyage, and should, immediately, thereafter, repudiate the contract and refuse to perform it, no one, I apprehend, would seriously contend that the owner could send the vessel on a long and expensive voyage, in a fruitless effort to obtain profitable employment for her during the term of the charter party, without the consent of the charterer, and thereby fasten *285 upon the latter the whole expense of the voyage. In such a case the proper measure of damages would be the difference between the contract price and the cost which the owner would have incurred if the contract had been performed, subject only to such a reduction as the charterer would have been entitled to on his proving affirmatively that the ship had, or might by a reasonable effort have earned a profit during the term of the charter party. I am, therefore, of opinion that the defendant is not chargeable with the loss incurred by the plaintiffs whilst seeldng for employment for the boat and barge, and that the plaintiffs are entitled to recover only the profits they would have realized by performing the contract, viz: the sum of two hundred and twenty-three dollars in gold coin.

Judgment reversed and cause remanded, with an order to the Court below to enter judgment for the plaintiffs for two hundred and twenty-three dollars in United States gold coin.

Mr. Justice Wallace dissented.

Mr. Chief Justice Sprague did not participate in the foregoing decision.